Gold & Silver Daily Market Recap: October 12th, 2012

Precious metals continues it consolidation pattern lower as the market digest U.S data releases and awaits Chinese data over the weekend.

Spot gold traded lower to $1758 as traders booked profits ahead of the weekend not wanting to remain long due to the release of China's trade balance due to be released Saturday. U.S data released this AM saw University of Michigan's consumer confidence report that its main index to a 5 year high of 83.1 in October from 78.3 last month. US PPI for September came in at 1.1%, core PPI was flat, below the expected and previous reading of 0.2%.

The mixed data initially sent the yellow metal higher, but quickly reversed as the Euro/USD pair dropped to 1.2930. The metal in recent weeks traded to a 11 week high of $1798 but couldn't hold onto those gains as we have seen big sellers as the market approaches $1800.

"Strategically, we still view gold as a “buy-on-dips” metal, and still favour a long position". Said Standard Bank

The recent upbeat data has kept the metal on its back foot only finding support as buyers remain cautious over the Eurozone. Standard & Poor's downgraded Spain to just one notch above investment grade kept investors on their toes. Spanish bailout hopes and rumors are likely to persist into the weekend as nothing was settled over this past week. Greece continues to be the other sore thumb of Europe as International Monetary Fund Head said that forcing debt-burdened countries like Greece, Portugal and Spain to reduce their deficits too quickly is counter-productive because it hurts the economy. This week German Chancellor Angela Merkel visited Athens for first time since the onset of the European debt crisis which sparked major riots across the country.

Spot silver remains resilient trading above key support of $33.30, the metal has traded in a range of $33.50 to $34.60 over the past week as dip buying has kept the metal buoyant. The  Chinese data release this weekend will have a great impact on the dual role metal as it will speak to China's demand.

October 12th Closing Prices